HP, Intel tussle with Oracle over dual-core chips

As more cores end up on each chip, software licenses will increase in cost--but out of all proportion to the cost of the hardware.

February 11, 20051:21 PM PST

As they develop their dual-core-processor strategies, Intel and Hewlett-Packard appear to be rounding on a common target they see as hampering their ambitions: database giant Oracle.

Intel plans to launch its first dual-core processor in the second quarter of this year, in the shape of the Pentium Processor Extreme Edition. This will be followed by Montecito, a dual-core version of its Itanium server chip, and future multicore versions of Pentiums, Xeons and Itaniums that will have up to 32 cores each. But hardware vendors are worried that traditional models for software licenses will restrict sales of their multicore offerings.

The problem, they say, is that as more logic cores are squeezed into each chip, the software licenses will increase in cost accordingly--but out of all proportion to the cost of the hardware.

"Oracle is probably the most misaligned," Intel enterprise marketing manager Shannon Poulin told journalists on Thursday. "They have focused on licensing by core, but we're trying hard to have them see things the way we do."

HP, which has been involved in the development of the Itanium processor since the beginning and which recently transferred 250 chip designers to Intel, is also piling the pressure on Oracle, according to Peter Kraft, HP's director of business-critical systems.

"We have meetings twice a year with our biggest customers," said Kraft. "These meetings last almost a week, and we invite people from Intel, Oracle and so on. The question that comes up in every meeting to Oracle is, 'When will you change your licensing scheme?'"

Although the common plea to Oracle regards virtualization, Kraft said, the company's multicore strategy is also a cause for concern. "The processor is not a fixed entity anymore, as it was. The world's changing, and Oracle has to change with it," said Kraft, who believes Oracle will eventually rethink its approach to licensing.

Oracle doesn't see it that way, however. In an e-mailed statement, the company's Jacqueline Woods said, "We don't have a position with respect to dual-core processors. A core is equal to a CPU (central processing unit), and all cores are required to be licensed. Therefore, if you have a dual-core processor, you are required to have two processor licenses. A core is equal to a CPU, and all cores are required to be licensed."

Woods said Oracle has no plans to change its licensing strategy. "We have not increased our prices. At the end of the day, the consumption of the Oracle software is unchanged."

Oracle is not the only software company alarming the hardware vendors. Intel's Shannon pointed to BEA as another software company that doesn't yet see software licensing on dual-core systems the same way Intel does. "BEA is an in-betweener," he said. "They're talking about licensing on the basis of 1.25 times (the price of a license on a single-core CPU) rather than two times." But, he added, Intel has "thousands of engineers sitting at these companies to make sure that their licensing works for customers."

BEA did not immediately respond to requests for comment.

And Microsoft still has some way to go in the eyes of the hardware vendors, particularly in on-demand computing, where processors are switched on--and paid for--according to workload.

"If you buy a box with 32 processors, you can pay HP only for what you use, but you still have to buy 32 full licenses from Microsoft and Oracle," said Intel's Kraft. "This might change in the future, but there are so many licensing schemes available now, that it is really confusing for the customer."